Scott Morrison blathers as ABC questions population ponzi

Last Night, ABC The Business’s Carrington Clarke did a fantastic job painting Scott Morrison into the corner over Australia’s insane population growth (immigration), asking the treasurer to explain why the government is running a mass immigration program when wages growth for the average worker is going backwards after inflation.

The key data point that Carrington refers to is the Average Compensation Per Employee figure, released in yesterday’s national accounts, which rose by only 0.9% in the year to September in nominal terms – below the 1.8% increase in inflation (CPI):

Average Compensation Per Employee has also fallen by 3.3% in real (inflation-adjusted) terms since March 2012:

Watch on as Scott Morrison squirms, gets angry, and outright lies in his response to Carrington’s probing.

Comments

This lack of an increase in compensation per employee should be no surprise, cos the AI and robots are too paying their way, probably better than paying their way, yet they aren’t classified as employees.
Coupled with the fall of the working man is the situation where active AI is now earning money in financial markets.
and as the pro AI mob say the faster the roll out of AI the better cos it boosts outcomes.
Merry Xmas from Scott Morrison.not

As Japan, Germany and the Scandinavian countries have demonstrated, AI is not a significant cause of wages weakness….up to now. ‘Course, a few years down the track and things may begin to change on that front.

As one horse said to the other, these motor thingys will never take off, they dont eat grass, sooner or later they will stop.
Until now AI was a servant. the Greeks had an AI machine to draw ballots a kleroterion but,
AI has now evolved to be a companion, soon to be a master.

I’m still wondering how AI and automation are going to replace the dual producer/consumer nature of human workers, which ensures that output produced is consumed…..which is the whole point of production. Mass unemployment and poverty = much less broad consumption, therefore less need for production whether it be human or automated.

There are some very serious questions that need answering before it’s clear that humans can actually be made largely redundant over the next few decades.

Left T, you are reading an old song sheet
Business -capitalism, now is a closed loop, capital lent >middleman>capital returned.
Any leakage from that loop results in loss of efficiency.(profit )
For the short term, our lifetine any how humans are leakage.
It will take the likes of the French revolution to turn this colossus around.> then who will have the skills to run the new economy>>>AI.

I’m still wondering how AI and automation are going to replace the dual producer/consumer nature of human workers, which ensures that output produced is consumed…..which is the whole point of production. Mass unemployment and poverty = much less broad consumption, therefore less need for production whether it be human or automated.

I would have thought this was obvious ? The production goes mostly to the handful of elites who can afford it, the rest of humanity gets thrown on the scrapheap, Elysium-style.

“The production goes mostly to the handful of elites who can afford it, the rest of humanity gets thrown on the scrapheap, Elysium-style.”

That reminds me of a stand-up one liner – “You can’t have everything – where would you put it?” The idea of all the production going to a few is unlikely to work in reality. The big idea about the AI and robotics is that it breaks the scarce resource model. Everything needs to be rethought. The Elysium model at one end, the Star Trek post scarcity model at the other. Neither are entirely practical, so we don’t know for sure how it will play out.

The big idea about the AI and robotics is that it breaks the scarce resource model.

Not until we have replicators.

You still need raw materials to build stuff, even if the whole lifecycle from pulling a rock out of the ground to recycling a computer never sees human hands. The wealthy and powerful control those raw materials (and almost certainly will control the AI and robotics as well).

WW and DrSmithy – to be gender-specific for the sake of an example: even a super-rich bloke has only one dick and one stomach and there’s only so much he can do for them.

How many iphones can Bill Gates use? How many cars is there a point to him owning? How many tv’s, pc,s George Foreman-endorsed electric grillers, tables, chairs, shirts, trousers is he really likely to want? Can he swill enough piss to replace the beer consumption of millions? Ok, grog would be one of the last things a poor, unemployed person would want to give up but surely you get the picture?

The consumption of millions of people with the employment that gives them the means to consume accounts for over half of economic activity. For a huge slab of the necessity for things to be produced at all.

It’s the foundation of our modern civillisation.

How do you propose that a large percentage of those that account for this great collective mass of consumption be made redundant altogether and still keep up that level of consumption?

Will automation make everything so cheap that we’ll all be able to live like kings on the dole?

How do you propose that a large percentage of those that account for this great collective mass of consumption be made redundant altogether and still keep up that level of consumption?

The obvious answers are war, famine and disease.

Why does the level of consumption need to be maintained ? Are you trying to say that modern production physically cannot be scaled down to deal with, say, tens – maybe hundreds – of millions of consumers rather than billions ?

LT:the answer is easy, following a precedent of the oldest societies we have, say, china, india, a good part of europe, most of ASia. Africa ,south america
the wealth is concentrated in the hands of a few leader families, there is a mid tier of lieutenants, and the majority are peasants.
There are many reasons that occurs, but it is mostly human nature.
Maybe AI and the mass availability of lethal weapons will alter that,
but any significant change will require arms and physical force.
Some of this uncertainty is what is driving bitcoin

If you think we’ll all just go back to the days of serfdom, the word I have is HYSTERESIS. Where we have been before – what we have already built up and shaped – heavily influences where we go in the future. Just as we have encouraged household debt to balloon so far for so long that anybody who thinks we can just hike interest rates back up to where they were 20 years ago and everything will be fine is kidding themselves, the same applies to crushing large swathes of the populations consumption power.

Wage growth may be kaput at present but we have come a LONG way from the days where the average person consumed some basic food, a couple of sets of clothes, rent and a small handful of odds and ends. We have evolved to become a high-consumption civilisation.

How do we rapidly make large percentages of wage earning consumers permanently redundant and still allow them to continue the level of consumption that has evolved to make everything go round?

Or else, what do we replace it with so that everything doesn’t just wind down, grind to a halt and eventually implode?

lt, you cant, there are going to be a heap of peasants
John howard thought of that when he made access to debt to all
the example of the talents doesn’t tell you how the farmer originally got his hands on the 3 talents, but it tells you how he retrieves and reallocated them.
the opportunities and wealth go to, are directed to, those who can best manage it
the rest can live in the field. so sayeth the bible
there is going to be massive social disruption, cos the punters have done this to themselves.

@Lef-tee: I tend to think that the future is likely to contain a lot of violent fragmentation. Large, unstable systems break down into a collection of smaller systems (if anything survives at all). If the breakdown is unplanned, it does tend to be violent.

If we are smart enough and organised enough as a species, we should try to pre-empt this. When engineering our own social systems, we should take our cues from existing complex systems that have been proven to work over time, having evolved under selection pressures.

The irony in all of this is that if greatly more efficient automated production ends up turning vast swathes of workers into peasants who cannot afford to consume – the faster and faster that automation can produce output…..the less and less that increased output will be necessary. In fact, it will serve no purpose at all if it cannot be consumed.

Unless this problem is solved then making large percentages of the workforce permanently redundant would represent the most massive own-goal in the history of capitalism. Probably enough to make today’s capitalism end up going the way of old Soviet communism.

I’m suspicious (hopeful) that it won’t actually get this far – I can’t see how the process of ongoing and increasing demand destruction won’t end up causing permanent recession/depression which the public will demand a solution to, probably long before we reach the kind of unemployment we saw during the Great Depression.

LT XXXX eavy mate
It is not about speed it is about retaining power
all the loot in the world is of no use if you dont have power.
the threat to capitalism as JH and co saw it was of the punters getting thier hands on some money and biuldint alternate power bases.
the best solution was to give the punters access to money and let em do emselves in.
Its an old tactic, give your enemy all the arms they need to defend emselves knowing full well they are unstable and will invariably turn on each other. has happened numerous times and still today the arms trade keeps Arabia for example isolated. and who sells em the ammo. and Jerusalem is now the capital???
it is a victory for capitalism, cos the immediate threat has self destructed.

Automated factory in the desert (or orbit). Automated resource collection (possibly carbon from CO2 to make graphene). Solar power. Ability to replicate itself and repair as well as make stuff. That is perhaps 20 years away, and violates no physical laws. That changes everything, and has never been seen before. Consider what that means.

DM on a small scale there is a tomato factory in the near desert of SA which is powered by sun and salt water.
turns out tons and tons of tomatoes for coles, i think
has totally disrupted the supply of tomatoes straya wide
Notice powered by sun and salt water, only, but has some human attendants.
Financed by KKR.

The irony in all of this is that if greatly more efficient automated production ends up turning vast swathes of workers into peasants who cannot afford to consume – the faster and faster that automation can produce output…..the less and less that increased output will be necessary. In fact, it will serve no purpose at all if it cannot be consumed.

Automated factory in the desert (or orbit). Automated resource collection (possibly carbon from CO2 to make graphene). Solar power. Ability to replicate itself and repair as well as make stuff. That is perhaps 20 years away, and violates no physical laws. That changes everything, and has never been seen before. Consider what that means.

Who owns the resources from which things are built ? Iron, copper, lithium, gold, cobalt, water, oil, etc ? Is graphene the universal substance from which literally anything can be constructed ?

Who owns the land upon which the factory is built ? Who owns the rockets that put it into orbit and the fuel they used ? Who owns the robots ? Who owns the code they run ?

The wealthy and powerful of the world are not going to give up everything that makes them who they are easily. They own everything you need to realise your end goal.

@ Wiley: XXXX heavy gives me a headache, I’m more of a craft beer man. The Poms make some really good beers too.

I’d say that pushing large sections of the population into poverty is not the best way to hang onto power – history is littered with heads on spikes.

@drsmithy: it would be preferable if we didn’t keep growing to the point where we suck the planet dry of every last resource. But have you noticed things improving every time economic growth goes into reverse?

Would you advocate war, famine and disease as a solution if those things landed in your lap? (not suggesting that you’re actually advocating, rather just seem fatalistic about it).

My point is simply that we have spent a couple of centuries evolving into a high material consumption civilisation – the devices that enable you and I to converse with one another about this right now are products of that themselves – and you cannot simply yank out the pillars holding up a civilisation without dramatic consequences: Hysteresis.

Perhaps one day we will evolve to be like [url=https://www.gateworld.net/wiki/Nox]the Nox from Stargate[/url] but until then, economic growth is what we have.

You are thinking about this from a rear view mirror perspective, but it is a good question. Ownership requires value and is predicated on scarcity. We are in the process of undermining those things. Economics is ultimately a system of rules to organise human activity. Any system can replace it, as long as the new system is stable. There are possible new configurations of social organisation that work differently. How – or if – we get there is an open question. The process is already underway. Ask yourself why is Bitcoin sucking up vast amounts of “money” when all it is is an immutable prime number that can be sliced up into pieces? Our economic system is searching for new rules, and they may not look like anything from the past. One hundred years from now, people may struggle to understand what “ownership” is.

The whole “AI is a threat to humanity” is a b#llsh1t argument. AI will simply act as a supplement to population decline, which is just around the corner. Added to which, Lef-tee, makes the valid point that, if most humans are unemployed who the hell are the ‘elites’ (or owners of capital) going to sell their goods to?

Sorry but the people who fret over AI and robots are thick as planks — there is no practical difference between them and the Luddites who wanted to prevent the industrial revolution from gaining traction.

While AI/robotics may well worsen the problem, the change in bargaining power can be traced goes back to the end of the industrial era. It is intriguing that the nadir of inequality in developed countries occurred some 40 years ago, just as the industrial economy was transitioning to the services economy.

If industrial workers go on strike idling a billion dollar plant, employers will raise their wages. The owner of capital feels the pain harder and faster than the supplier of labour.

Interesting for sure. the owner of the plant will have insurance against workforce interruptions
the losses paid out by the insurance come from the super of the workers, and the workers spend so much of their income into gambling drugs that their time to financial failure is measured in days or hours.

The point you make is a myth with respect to AI and Robotics. The reason why real incomes are flat is due to labour arbitrage via the importation of low skilled labour. The AI/Robotics wave has yet to really start.

Lowering cost does not generate economic value. The use of robots has penetrated the German economy for a long time now but this economy has experienced low levels of unemployment and increases in real incomes. The reason being is that price is one of a number of factors that use to decide when purchasing a product. If it was all about cost then the Germany economy would not be what it is. The Germans focus on using technology to create ‘competitive advantage’. As do the Chinese, Japanese, South Koreans, etc.

As for Australia we are toast as the idiots in government and business ‘intelligentsia’ are ignorant to what actually generates economic wealth but are greedy.

Spending on almost every discretionary purchase was down in the September quarter, as spending on almost every unavoidable expense increased, led by electricity and rent.

Kiss your rental yields goodbye you selfish pricks because we’re hitting the ceiling. I do love how the article goes on to mention electricity prices though and doesn’t touch any further on the cost of housing; the supermassive black hole in the room.

Carington mate, step into my office. We need to have a chat, you see it’s about the questions you asked Mr Morrosion, it’s been strongly advised that we do not question immigration in this country. Otherwise they will take away our nice shiny toys.

I don’t quite get this. Yes I can understand the argument that as more and more workers migrate here this supresses the growth in the amount each worker is paid. But why is the economy being so flexible in making room for the increased workforce? as in, why is the unemployment rate not increasing, why are more Australians leaving welfare and joining the workforce even though there are ever more migrant workers? One reason I can think of is that many of these so-called employed are actually picking up part-time and casual work to help pay the bills but are not able to secure the type of job that gives them long term financial security. So the casualisation of jobs is masking how fragile the economy is. But could it also be that Morrison is partly right, that the economy is showing strength in being able to absorb all these new workers. (not interested in the politics of it, just trying to understand it from a policy perspective).

Yes Carington should have countered with “gig economy” replacing full time work and the casualisation of work for many. That’s driving wages down, even if they are working more or have access to more variety of jobs they are not being paid full time wages and benefits etc..

I also loved the “South Australia” is crying for population growth, well importing more people won’t fix it. Adelaide used to be the third biggest city in the country what killed South Australia was mismanagement of it’s economy. Fixing those problems and creating more jobs there would attract more people out of Melbourne/Sydney/Brisbane/Canberra etc.. and over to South Australia.

I know I’d go over there in a heart beat if I could find good jobs easily. Lord knows I’ve tried buying a house there anyway, I do like what they are doing re: renewables and now with their broadband plan s to superseed the NBN it’s as if a lightbulb went off over there and they realised they need to build for the future if they want to attract more talent over there.

Bwah haahah “strength”. What, an economy with bugger all innovation and productivity? People are by and large creatures of habit and being social, tend to try to do what everyone is doing including denying the inevitable. They roll over, but there’s a limit to this. People are now speaking to each other and connecting the dots of work visas, immigration, wages, high housing costs and big personal debts and weakening wages. Soon some might start to realise the economy is in an increasingly fragile situation as weakening wages begin to strain against their mega mortgages and are also undermining consumer spending. They can talk it up for all they like – there’s a limit to this, it’ll only take one black swan shock.

You all don’t understand the numbers. If you have a job, your income has increased infinitely from the time you didn’t have a job. That’s what this Superstar Treasurer has delivered. Infinite wage growth!

As if building the hulls of submarines that would be filled with mostly hugely expensive foreign made technology could ever be an adequate replacement for a fully integrated auto industry was always delusional. Too late, the fat lady is getting ready to sing.

Morrison makes a very telling statement 3:52 with regard to what drives him ideologically:

…particularly South Australia, I mean, they’re screaming out for population growth, because their economy is suffering so badly. It doesn’t matter if they’re Labor or Liberal, they want to see high population growth rates in South Australia
…
and what drives your growth in the economy is certainly population growth…

Growth, growth, growth, growth, growth. Growth is good m’kay?

No Mr. Morrison. All complex systems must eventually stop growing or they will collapse as it becomes impossible to maintain state within the envelope required for survival. This typically happens because exponentially increasing energy consumption is required to keep rising entropy at bay, yet available energy is limited.

Said another way, increased entropy means an increased number of possible states (configurations) competing for existence. Only a small number of those states are desirable and as the entropy of the system increases, the ratio of desirable to undesirable states decreases. Maintaining the existence of desirable states against undesirable ones requires constant surveillance, repair, resource input and energy input, all of which must increase exponentially as entropy increases.

If any one of those factors hits a limit, then the whole system has hit a limit to growth and must find a way to stabilise.

Anyone who works with complex systems should know this. As one of the most important people in a position of authority to trigger change in a complex system that impacts all of us (our economy), Mr Morrison apparently does not know this.

Growth is incredibly important for the banks, and for the FIRE economy in general.
Without constant growth in the economy, which is just a receptacle of debt filled by banks these days, the risk concentrates and becomes obvious. The most risky are always the ones to last take on the debt. But if there is no end, there will be no risk.

In fact, as can easily be worked out, as long as there is constant growth in debt, and that debt directly sets the value of whatever it is secured against, as debt/time approaches infinity, risk/time approaches zero.

Yes, Carrington Clarke did a great job taking Morrison to task with inconvenient facts and figures that clearly upset the treasurer.. Unfortunately few people watch The Business. Far more listen to ABC radio going to work in the morning. Today (as usual) presenters John Faine and Fran Kelly (on two separate ABC stations) gave Morrison the wave through on bullshit claim after bullshit claim.
Specifically…
Morrison’s claim that the government is a big spender on infrastructure. $75 billion no less! But no questioning by the ABC hosts as to the time frame (spread over the next 10 years), no mention of how little has been spent on infrastructure during the last five years, no reference to infrastructure spending as a % of GDP, as a % of the population, as a % of total government revenue or outlays. etc.etc.
Morrison was also crowing about how many jobs have been “created” under his government. Unfortunately there was no mention by the ABC shock jocks as to how many hundreds of thousands of jobs have been LOST during the last five years under the coalition, how many higher paying, secure full time jobs have been replaced by lower paying, insecure part time/casual jobs. No mention also about why the Treasurer’s claim of 2.8% wages growth is growth due to growth in the population and only true when counted in absolute nominal terms, NOT when measured in terms of wage compensation per employee (0.9%).

And of course, no mention at all by the ABC radio journalists of any of the negative effects that come with massive population growth due to the current nose bleed levels of immigration. They (together with Morrison) dared not go there.

Exactly, minimal msm exposure against politicians who know how to parrot the same line over and over…… keeping straight face.
Its too hard to quantify the problem to people with miniscule attention spans and those who simply don’t want know….. head in the sand types ……. “oh look at that hilarious thing on facechatter …… love that stuff”……. that’s real life for so many.
And if fixing some of this involves 65% of owners and mortgagees watching home values fall, watch the self denial gather pace !

See that look Scummo had while getting asked the first population question? He was thinking “why doesn’t he just ask the questions I faxed earlier like that nice Leigh lass does? Who is this nerd anyway? Carrington. Pfft. Where’s Chris or Emma? They’re always nice to me, never ask anything I haven’t told them to. I’ll have to speak to the Guthrie girlie and get this…oh sh!t, he finished the question and waiting! Just talk Scott, just talk…”

1000 jobs per day equates to 365,000 jobs. If the population has increased by 389,000. So jobs growth is not even cover the increase in population. Mean the average person is going backwards. This is fundamentally the Coalition problem. They continue to try and spin a story of success, instead of defining and dealing with the reality of most Australians.